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INCOME TAXES | 12 Months Ended
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Dec. 31, 2016
INCOME TAXES |
INCOME TAXES | 14. INCOME TAXES The provision for income taxes for the years ended December 31, 2016 and 2015 consists of the following:
|  | For the Years Ended December 31, |
|  | 2016 |  | 2015 |  |
Current provision |  |  |  |  |  |  |  |
Federal |  | $ | — |  | $ | — |  |
Foreign |  |  | — |  |  | — |  |
State |  |  | (2) |  |  | (36) |  |
Total current benefit |  |  | (2) |  |  | (36) |  |
Deferred credit |  |  |  |  |  |  |  |
Federal |  |  | 487 |  |  | (7,165) |  |
State |  |  | 5,226 |  |  | (2,403) |  |
Total deferred credit |  |  | 5,713 |  |  | (9,568) |  |
(Decrease) increase in deferred tax valuation allowance |  |  | (5,713) |  |  | 9,568 |  |
Total benefit for income taxes |  | $ | (2) |  | $ | (36) |  |
The (decrease) increase in the deferred tax valuation allowance was $(5,713) and $9,568 for the years ended December 31, 2016 and 2015, respectively. The changes in the deferred tax valuation allowances in 2016 and 2015 were primarily the result of (decreases) increases to the deferred tax assets pertaining to federal and state NOLs. The tax effects of the temporary differences and NOLs that give rise to significant portions of deferred tax assets and liabilities are as follows:
|  | As of December 31, |
|  | 2016 |  | 2015 |
Noncurrent deferred income tax assets: |  |  |  |  |  |  |
Net operating loss carryforwards |  | $ | 79,966 |  | $ | 81,221 |
Intangible assets |  |  | 19,021 |  |  | 22,886 |
Accrual and reserves |  |  | 5,201 |  |  | 5,919 |
Other |  |  | 52 |  |  | 75 |
Total noncurrent deferred tax assets |  |  | 104,240 |  |  | 110,101 |
Valuation allowance |  |  | (103,623) |  |  | (109,336) |
Noncurrent deferred tax assets, net of valuation allowance |  |  | 617 |  |  | 765 |
Noncurrent deferred income tax liabilities: |  |  |  |  |  |  |
Fixed assets |  |  | (617) |  |  | (765) |
Intangible assets |  |  | — |  |  | — |
Total noncurrent deferred tax liabilities |  |  | (617) |  |  | (765) |
Net deferred income tax liability |  | $ | — |  | $ | — |
Valuation allowances of $103,623 and $109,336 have been provided for deferred income tax assets for which realization is uncertain as of December 31, 2016 and 2015, respectively. A reconciliation of the beginning and ending amounts of the valuation is as follows:
Valuation allowance as of December 31, 2015 |  | $ | (109,336) |
Gross decrease for current year activity |  |  | 5,713 |
Valuation allowance as of December 31, 2016 |  | $ | (103,623) |
As of December 31, 2016, the Company had federal NOL carryforwards of approximately $210,775 expiring in various years through 2036. The majority of the NOL carryforwards will expire in various years from 2028 through 2036. As of December 31, 2016, the Company had unapportioned state NOLs in the aggregate of approximately $210,775, expiring in various years from 2021 through 2036, based upon various NOL carryforward periods as designated by the different taxing jurisdictions. The reconciliation between the statutory U.S. federal income tax rate and the Company’s effective income tax rate is as follows:
|  | For the Year Ended
|  | December 31,
|  | 2016 |  | 2015 |
Statutory U.S. federal income tax rate |  | 34.0 | % | 34.0 | %
State and local income taxes, net of federal income tax benefit |  | 34.4 |  | 4.6 |
Permanent differences |  | 12.7 |  | (0.4) |
Change in valuation allowance |  | (68.8) |  | (38.2) |
Change in uncertain tax positions |  | (14.8) |  | 0.2 |
Other |  | 1.8 |  | — |
Effective income tax rate |  | (0.7) | % | 0.2 | %
The Company accounts for the uncertainty in income taxes by prescribing a minimum recognition threshold for a tax position taken, or expected to be taken, in a tax return that is required to be met before being recognized in the financial statements. The changes in the Company’s uncertain income tax positions for the years ended December 31, 2016 and 2015 consisted of the following:
|  | For the Year |
|  | Ended |
|  | December 31, |
|  | 2016 |  | 2015 |
Beginning balance |  | $ | 56 |  | $ | 81 |
Tax positions related to current year: |  |  |  |  |  |  |
Additions |  |  | — |  |  | — |
Reductions |  |  | — |  |  | — |
|  |  | — |  |  | — |
Tax positions related to prior years: |  |  |  |  |  |  |
Additions |  |  | — |  |  | — |
Reductions |  |  | — |  |  | — |
Settlements |  |  | — |  |  | — |
Lapses in statutes of limitations |  |  | (29) |  |  | (25) |
Additions from current year acquisitions |  |  | — |  |  | — |
|  |  | (29) |  |  | (25) |
Ending balance |  | $ | 27 |  | $ | 56 |
The amount of unrecognized tax benefits at December 31, 2016 that would affect the effective tax rate if the tax benefits were recognized was $45. It is the Company’s policy to include interest and penalties in tax expense. During the years ended December 31, 2016 and 2015, the Company recognized and accrued approximately $6 and $18, respectively, of interest and penalties. The Company files income tax returns in the U.S. federal and state jurisdictions. As of December 31, 2016, open tax years in the federal and some state jurisdictions date back to 1996 due to the taxing authorities’ ability to adjust NOL carryforwards. The Company’s 2008 and 2009 federal tax returns were examined in 2011 and no material adjustments were identified related to any of the Company’s tax positions. Although these periods have been audited, they continue to remain open until all NOLs generated in those tax years have either been utilized or expire. Section 382 of the Internal Revenue Code of 1986, as amended (the “IRC”), generally imposes an annual limitation on the amount of NOL carryforwards and associated built‑in losses that may be used to offset taxable income when a corporation has undergone certain changes in stock ownership. The Company’s ability to utilize NOL carryforwards and built‑in losses may be limited, under this section or otherwise, by the Company’s issuance of common stock or by other changes in stock ownership. Upon completion of the Company’s analysis of IRC Section 382, the Company has determined that aggregate changes in stock ownership have an annual limitation of $14,284 on NOLs and built‑in losses available for utilization based on the triggering event in 2010. To the extent the Company’s use of NOL carryforwards and associated built‑in losses is significantly limited in the future due to additional changes in stock ownership, the Company’s income could be subject to U.S. corporate income tax earlier than it would if the Company were able to use NOL carryforwards and built‑in losses without such annual limitation, which could result in lower profits and the loss of benefits from these attributes. In February 2013, the Company adopted a Stockholder Rights Plan, which was amended in February 2016 and approved by our stockholders (as amended, the “Rights Plan”), designed to preserve the Company’s substantial tax assets associated with NOL carryforwards under IRC Section 382. The Rights Plan is intended to act as a deterrent to any person or group, together with its affiliates and associates, being or becoming the beneficial owner of 4.9% or more of the Company’s common stock and thereby triggering a further limitation of the Company’s available NOL carryforwards. In connection with the adoption of the Rights Plan, the Board declared a non‑taxable dividend of one preferred share purchase right (a “Right”) for each outstanding share of the Company’s common stock to the Company’s stockholders of record as of the close of business on February 22, 2013. Each Right entitles its holder to purchase from the Company one one‑thousandth of a share of the Company’s Series A Junior Participating Preferred Stock at an exercise price of $9.81 per Right, subject to adjustment. As a result of the Rights Plan, any person or group that acquires beneficial ownership of 4.9% or more of the Company’s common stock without the approval of the Board would be subject to significant dilution in the ownership interest of that person or group. Stockholders who owned 4.9% or more of the outstanding shares of the Company’s common stock as of February 12, 2013 will not trigger the preferred share purchase rights unless they acquire additional shares after that date. As of December 31, 2016, the Company had $69 of unrecognized tax benefits, all of which would have a favorable impact on income tax expense. It is reasonably possible that unrecognized tax benefits will decrease by up to approximately $69 as a result of the expiration of the applicable statutes of limitations within the next twelve months. The Company recognizes interest and penalties related to uncertain tax positions as income tax expense. The Company had accrued interest and penalties of $42 as of December 31, 2016. As of December 31, 2015, the Company had unrecognized tax benefits of $140, of which $84 represented accrued interest and penalties.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32559-109319 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32718-109319 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32537-109319 + Details
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